Thinking small about business

As the nation debates solutions to our stagnant economy and continuing unemployment crisis, more elected leaders now agree that small-business growth plays a crucial role in job creation. An estimated 27 million small businesses employ more than half the country’s private-sector workforce, creating 60 percent to 70 percent of all new jobs.

Congress has been debating various proposals aimed at helping small business — lower taxes, fewer regulations, greater access to credit. But one issue offers a surefire way to provide more opportunities: government contracting.

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The federal government spends a half-trillion dollars on contracted goods and services. This offers small companies an extremely large market to provide services and products. With the federal government as a customer, small firms can grow and create jobs. When a large company wins a federal contract, it usually has the resources to do the work. But a small business will most likely need to hire new staff to meet the new contract’s demands.

The biggest problem for small firms that want to enter the federal procurement marketplace is limited opportunities. Roughly 90 percent of the businesses that bid on federal contracts are small. However, the governmentwide goal for using small contractors is only 23 percent.

Though this 23 percent goal is grossly unbalanced, it hasn’t even been met in six years. We learned last week that agencies not only missed the mark but went in the wrong direction — slipping back to 21.7 percent.

That represents $3.8 billion that should have been part of competitive contracts with small businesses. This lack of an ambitious effort to use small firms denies the government — and the nation — the innovation, quality and savings that small businesses can offer.

To address this issue, our committee embarked on an aggressive initiative to reform the procurement system to give small businesses a fair shot. We passed 11 bills with bipartisan support to help fix various small-business contracting problems. One that might be the most effective is legislation that raises the small-business goal from 23 percent to 25 percent, while also holding federal agencies accountable for meeting this in their employee performance plans. There is no question that with some extra effort and new thinking the government can accomplish this goal.

This effort to increase small-business contracts and enforce the goals has been endorsed by more than 25 business groups and has strong bipartisan support in the House. In addition, two Democratic senators have introduced companion legislation. The House Armed Services Committee liked the provision so much that its members voted to include it in the National Defense Authorization Act, and it won bipartisan support on the floor.